A
trust is not a separate legal entity. It simply holds property in trust for the
beneficiaries. It is a legal structure
used to maximize the financial advantages of being in business, such as
distribution of income, taxation and protection from creditors.
The
trustee must administer the trust by a trust deed, which sets up the trust and
determines the rules by which it operates.
The
trust structure offers advantages to a family business, which cannot be gained
by other three business structure discussed.
At the same time, many of the advantages of a company structure can be
maintained by having a company act as trustee. Members of a family business
govern the trust, as both directors of the trustee company and beneficiaries of
the trust. Income produced by the trustee company can be allocated to the
directors/beneficiaries during the financial year with the final allocation
made at the end of the financial year.
However,
trusts are complex structure and their establishment requires professional
advice. They are also subject to close
scrutiny from the Tax Office.
Your
decision regarding the most appropriate business structure for your venture
should be made after consultation with a professional or business adviser, such
as your accountant, solicitor, or local small business organization. Whichever structure is chosen, it is unlikely
that the structure will be final. Not
only will your business grow, but your financial and taxation situations will
change, and legislation and tax developments nay modify the characteristics and
relative advantages of the various business structure. For this reason, your
business structure should be regularly reviewed.
Below
is an overview of the key features of the three main business structures
discussed previously. Trusts have been
omitted due to their specialized and complex nature.
Here are other business structures we discussed the past few weeks:
It’s as simple as 1... 2... 3...
Here are other business structures we discussed the past few weeks:
Want to learn more about your business structure for your art & Design?
It’s as simple as 1... 2... 3...
2: Send an e--mail Quantum Compass: partnership@QuantumCompass.com.au and receive your PDF " The Advantages and Disadvantages of being a “Trust”
3: Contact Vinh for a no cost, no obligation coaching session: http://www.surveymonkey.com/s/ArtShineDiscovery
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